Health Innovators
Health Innovators

Episode · 1 year ago

7X serial entrepreneur sells to Microsoft and gives us his winning strategies w/ Daniel Levitt

ABOUT THIS EPISODE

Startups can be challenging. And, with an abundance of ambiguous tips and strategies available, and it’s almost impossible to distill it down to actionable steps toward success.

Almost. 

Daniel Levitt has spent an entire career in the world of startups, learning the ropes by taking on roles tied to sales and marketing - critical components of any successful venture.

Self-branded a serial BIO/IT entrepreneur,  Daniel pulls back the curtain and gives our listeners a rare glimpse into the strategies he used that helped him sell one company to Microsoft.

In this episode, our viewers are treated to a sincere and thoughtful interview that takes the mystery out of why some companies succeed where others might struggle.

Grab a drink, turn up the volume and get ready to take notes. You’re not going to want to miss this one!   

 

Here are the show highlights:

  • How staying humble can build your expertise and bring more experience to your next venture (2:13)
  • The difference between - and importance of - technical founders and operational founders (6:42)
  • Why the method in which your startup raises money is critically important (9:20)
  • This scientific evidence can be a gamechanger for building a successful startup (24:19)
  • What investors want to see when they’re considering backing a startup (25:59)
  • The critically important reason to include customers in every stage of your ideation processes (30:26)
  • How to navigate success without sacrificing viability (33:10)

 

Guest Bio

Daniel Levitt is CEO and Founder at Bioz, a comprehensive AI search engine that empowers scientists to accelerate research toward cutting edge discoveries and technologies.

With a career dedicated to IT and life sciences, Daniel has successfully built and sold companies to such notables as Microsoft.

A self-professed serial Bio/IT entrepreneur, Daniel earned his BA in economics from the University of Berkeley in California and his M.Sc. in management from Boston University.

If you’d like to reach out to Daniel, or are looking for more information about Bioz, you can reach him by email at daniel@bioz.com, on LinkedIn at Daniel Levitt, or visit his website at Bioz.com.

Welcome to Coiq, where you learnhow health innovators maximize their success. I'm your host, Dr Roxy, founderof Legacy DNA and international bestselling author of how health innovators maximize market success.Through handed conversations with health innovators, earlier, doctors and influencers, you'll learn howto bring your innovation from idea to start ups to market domination. Andnow let's jump into the latest episode of Coiq. Welcome back to the showcoiq listeners. On today's episode I have Daniel Levitt with me. He isthe founder and CEO for BIOS. Welcome to the show, Daniel. Hi, they are great to see you and I'm happy to be here. Yeah, so thanks for joining me. Let's start off the conversation by giving ourlisteners and viewers a little bit about your background and what you've been innovating inyour journey. It's a very exciting story, so I want to make sure westart off with that absolutely. So you know, I maybe a kindof a little bit different from most. I spend my whole life in startups. Founded about seven companies around the no Bioi area and high tech, andthe journey has been interesting one. First Startup. I spent four years working, starting in sales, actually moving up through roles and marketing, and itwas an amazing journey with a startup which eventually did not succeed. But Ialways tell those who are young and coming out of college that, you know, it's tempting to start your company right when you leave college, but oftentimeit's better to join an existing startup, spend the time learning from others,you know, and really getting that experience and then maybe start your company ifthat's your journey. So yes, I find that to be very important.There so much learning to be had out there and you know those sometimes wethink we know it all. We might know a lot about that small areawhich we're trying to focus on, but there's so much out there which isvery generalized and applies to almost every company and I really think people should learn. And my going back to my background a little bit. So I didstart in a software company. After that company I had left. Originally,you know, I've started with which was a software company also, and thiswas a ninety nine, where I cofounded a company, was a CEO Company, was called Webpoint, and that company was later on acquired by Microsoft sothat was you know, you know, as a founder, you kind ofsay wow, this is a dream. You kind of start a company.You know, relatively quickly Microsoft comes knocking on the door. It was aphone call saying we're interested in chatting, go through the motions and then boom, Microsoft has acquired your company, interestingly enough to actually offered me a jobat Microsoft. Yeah, with a lot of stock options. At that timeI refused. My cofounders, the two technical funders, went to work thereand that was interesting because it sounded like, you know, this is an interestingmaybe point for people to think about, is you just sold your company,you made some money. You know, the last thing you really want todo is, okay, let me just go right to continue working ifyou don't have to. But so so, when I look back, you know, was it a mistake or not a mistake? It's hard to kindof say. Okay, in hindsight, but I think I should have maybebeen more humble and went to work for Microsoft, because that would have givenme another layer of experience and more of a corporate environment and I think thatwould have maybe been interesting decisions. I think that's the lesson. There isreally you know, even if you feel on top of everything. You're juststarting, you just learning. Yeah, go from there, and that wasan interesting point. After that I found it another company, or Profund atanother company as CEO, which is in the realm of personal protective equipment inthe medical field and we protect against Gamma radiation and it focuses on three areas. And first responders, on the space area, where astronauts are going tospace need protection from radiation, and also the medical professionals in a lab setting. They also need radiation protection. A lot of procedures use high levels ofradiation during procedures, and that company is now currently doing great. I leftit to do my current company, BIOS, and that company is now got aproduct actually on the International Space Station. So we just launched there about twomonths to go and it's right there, being warned by US or not.So it's really exciting to actually know that something you started from scratch hasa physical product with your company name now floating in zero gravity on their nationalspace station. And you know, next year there's a mission planned for ourproduct to go around the Moon on assist learner mission with a German Space Agency. So it's wonderful. How you can create something from an idea and thenyou really see it growing. But I will say it's that company has beenaround for almost ten years. Wow. Well, it's a long journey.The average startup takes about seven to eleven...

...years to exit, if they areso lucky. So patients is key here. Things can take many years for gettingthe product out there, building awareness, penetrating markets, monetizing. So that'sjust another lesson there in terms of be very patient and things can reallywork out. Even if today ten years or fifteen years, it's still fineas long as it's progressing. And then the third thing, which is kindof know what I believe is my third success, and this is the currentcompany, BIOS, which is a kind of a search engine for life scienceresearchers, whether they're in academia or by a farmat and what it does ithelps them conduct experimentation more correctly, more accurately. So we all know thata lot of scientific research is not reproducible. We I think the numbers are almosteighty percent of scientific research. If somebody goes and say, okay,I can see this article that was written, let me go out there and youtry to duplicate that experiment, they try to duplicate it and get thesame results and that they can't. They can't replicate it. So what we'vebuilt as a search engine which kind of uses natural language processing to analyze scientificarticles, structure the data and give the researchers who are doing these important experimentsfor us to develop new drugs and ture diseases just be more effective at that. So this is a is a wonderful AI company and we're doing great.We have customers like Thermo, Fisher Scientific and in New England, Bar Lads, Long Zo, Roche men. This is a very exciting journey which I'mon right now, and you know, Standford's invested in us and we're veryexcited. But again, this is a long journey. We've been doing thisfor almost seven years and now we're pushing monetization about a year or so in. But again, you know, you have to be patient. You cantake a long time until you really see the fruits of your effort. ButI think that's kind of my background a nutshell. I will add one littlepoint which is kind of Nice, as my dad's a professor at Stanford andwon the Nobel Prize and chemistry in two thousand and thirteen. So it doeshelp to have influential people, either as acquaintances or family members if possible,because that opens a lot of doors. You know, people listen. Whenthey get an email from a Nobel laureate, they will respond. So try toleverage people in your in your circle that already connected because you know,we're all bombarded with so much stuff today. It does help of someone who youknow can get you that attention. Not Bad, Daniel, not bad. So let's rewind a little bit to the Microsoft story, because I'm sureour viewers and listeners are pretty anxious us to hear a little bit more aboutthat experience. So, you know, take us through like when you firststarted the company. What was your the mindset or your dreams for the ExitStrategy? Did you ever, like, did you have your mind or yourheart set on Microsoft was like from Day One? You know, let's kindof just take us through that journey and how you got from and I havean idea to I'm selling it to Microsoft. Okay, that's very good, soI will will state that. You know, there I think they're different, two different types of founders, probably anymore, but just into categories thereare the technical founders, the ones who are either, in my realm,the software engineers though the grounds, who write the code and come up witha cool idea, or those maybe the scientists who have some kind of anidea for a medical device or some kind of a technology platform, like mycofounder, Dr Prin Letch me, who was at Stanford as a post docand came up with the idea for BIOS. So I find that, you know, it's not that I don't think that I have good ideas. Ifind that consistently over the last twenty five, twenty six years of doing startups,every single startup has been someone else's idea and it's always been a technicalperson, a scientist or engineer who's had the idea. And I find thatmy role was me that other have to be the person who comes and,you know, help some raise the money, build the team, build an executionplan and operates. So I think that's so in the Microsoft case Iwas the operator. I found, you know, an in a couple ofengineers or had this idea. You had some initial working productype and the ideais okay, let's find investors. Typically, Angel Investors are the best source forearly money, people who can write checks for, you know, asmuch as twenty five thousand, Fiftyzero hundred thousand dollars, and those initial checksare very helpful. We start with small salaries and the initial objective was notto sell the company. Of course it was sold relatively quickly. The objectivewas to raise a certain base amount of money that we could hire a fewpeople who could not only be engineers, so maybe three or four engineers intotal and maybe on the business development sales side, a couple of people aswell, if we're in that phase. And to do that, I believethat a company needs to really raise about a million dollars. Less than amillion dollars, it's hard to operate and it's very simply if you just lookat the burn rate a million dollars requires. Maybe if you spend Eightyzero a month, that can cover maybe, you know, seven, eight, ninepeople and an office for a year. So I would say that if youcan't raise a million dollars, and doesn't have to be in one jump,you can start with, say, raising Fiftyzero, then a couple hundred thousand. I recommend that the method to raise that money should always be on what'scalled a safe note. It's a called...

...it's a simple agreement for equity,something which why combinator came out with in the past people used to use convertibleon agreements, clas or convertible notes. It's not meant for the startup environmentsbecause they have a maturity day when investor can say, okay, after ayear, okay, I want my money back and I can put the startup into a very difficult situation. They're also interest bearing, which requires thatyou have to pay them more than they actually invested. So safe notes arethe way to do it. Raise that money, get started, hire peopleagain, but don't hire more people than you need. Try to have thefounders be the ones were doing most of the work, and it's amazing howa founder can take on many, many roles. A founder who's never done, you know, managing engineers. Sure they can manage engineers. They canstart, you know, looking at the sprints, they can put together agendas, they can have meetings with the engineers and it's surprising how far you canget without hiring so called professionals. The professionals need to come in when youstart scaling the business, but that can be many, many years down theroad it's that far off. Hire people who can individually contribute, engineers whoare going to not do the managing but do then do the work. Ialso find that the type of person you want to bring on, especially inthose early days, as someone who is very committed, very entrepreneurial. Soyou know, I'm not seeing people have to work all the time, butyou want someone who's excited, who has no problem answering an email on aSaturday or a Sunday, excited to work, you know, Friday night. Youknow it's it could be from home, but you know you want it tobe happy. Someone who expects a ninety five job should absolutely not beinvolved in early stage start up, even if they want to be an entrepreneur. It's not for them because really they're no benefits. The benefit is justworking on something cool with cool people, learning a lot, and I thinkwhen you tell people what's the main benefit, it's learning, they don't get itbecause, okay, what's about the money? What about my free time? You know? So. So I think you have to find the rightpeople for the early stage a venture and and then after that we miss weraise the money, we hired the small team and then the method was veryquickly to start getting to monetization. So we immediately started to find partners wecould have agreements with and and start to show proof that not only having developedtechnology, we've decult technology that other people actually need and want. So ifyou build something which is cool, it's not enough. Has To be solvinga problem or addressing a pain that someone else has. And I think there'salways this interesting point which I think really really resonates well with any startup.When you think about you know, is your product or something you developed goingto make money, and that is you know, are you firing someone elseor some other process or task? So think about it in that sense.Know what is being done today inefficiently or incorrectly, that your solution can actuallydo better. So you're actually firing the current way of doing things or youknow, intensially, you know, in the sense of firing the person,you're firing a current way of doing thing something and if, when you lookingaround you don't really see that one thing you're firing, it's going to bereally hard for you to get your product out there or service, because youknow it's hard to convince someone here I've got something new, they will ask, okay, how's it going to help me do what I'm doing better?It's going to be a hard cell. So you really want to try tolook for don't create things which are more like wants, create things that addressneeds and make sure you're actually confery cularly find what you're firing in the currentprocess. I think that was something we learned and then, you know,out of pure luck, Microsoft called us and was interested in learning more aboutour technology. I think the acquisition went very fast and there is a lessonhere as well, because the the technology we had built our platform one happenedto be happened to be Microsoft technology, and so when they did an evaluationof the technology in their mind they could very quickly see how they could incorporateour company's technology into their current platforms, which I think accelerated the process.So I think after that acquisition my thinking was, okay, let me thinkabout who could potentially acquire the company. Now. Maybe that should influence howwe're actually building our technology, because you can choose to code your platform inmany ways. You can choose the different platforms, and I think there's somefor thought to do that process of cake. You know, it'll definitely be easierto close an acquisition if you can be more aligned with the acquire incertain ways. So always kind of keep the keep that in the back ofyour mind. But that was a cool like a cool event. I willsay one thing which I think is important for founders to realize. This isgoing to you know, last point on on this Microsoft transaction is that there'sa concept of acceleration investing for stock options. So stock options, you know,you can also put in place something where, if the company gets acquired, then if you had to let's say three or four year vesting, allthose stocks will vest immediately, which means now you actually own those stock optionsand can convergent convert them into the shares of the acquiring company or cash.Okay. So, because we hadn't operated for that long, a lot ofour employees had stock options. The founders are okay, they usually have stockboard disagreement, actual s shares, so they're no problem there. But theemployees who had worked hard have stock options.

Not Enough of it. Had invested, some of them maybe not even past the cliff period, and theacceleration clause, you know, with something which would have helped them a lot, which was in those agreements. And I remember this interesting situation with oneof our investors who, you know, didn't agree with me. And thenevent I did what I thought was right. Is I actually said, okay,if I accelerate all the shares or all these options for the found forthe employees, you know, I might personally lose a couple hundred thousand dollarsand the investors would lose, the other foundersold lose, but these individuals wouldnow get another check of Eightyzero hundred thousand dollars, which could at that pointhave been a down payment on the house, instead of getting five thousand dollars.And and and I remember the argument with it, with with the investors, saying hey, no, I'm going to accelerate everyone. You know,the fact that we were sold relatively quickly was not in everyone's plan, butthey need to benefit as well. I don't mind giving a bit of mymoney. The investors were very against that, and I think that's kind of alesson as well. Choose who you want to be on our team.As an investor, you want people who are aligned with your values and andit's always about doing the right thing. So I always believe in doing theright thing. You have to look at the people around you. Karma doesexist and, you know, just be good, be nice and do theright thing, whether or not others agree. Would you're not? Yep. Solots a whole chalk full of lessons already packaged in one story. Ilove it. So, you know, one of the things that you saidthat I think it's really interesting is this distinction between the the founder, beingthe one that has the business acumen or commercialization acumen versus being the technologist orthe physician or the scientist that has the idea of the technology. I wouldalso say, you know, a building the company from a different mindset ofbeing technology first versus being customer first or is very different. So just kindof talk about that a little bit, because I wonder if your early backgroundin sales and marketing, you know, shaped your role as the business expertto come alongside these other innovators and then with that sales and marketing background,it made you think not only just about the problem but even about the customerfirst versus the technology or the science first. Yeah, I think that's all.That's all very interesting and also that I definitely agree with what you're saying. So I did start in sales. Wasn't not that I didn't tend onstarting in sales. Actually, I think it was a kind of a flutewhich happened at the time, whether it was in the kind of the midS and, you know, kind to sales at a startup if she wantsto work in marketing. But the interesting point here, this is what Irealize, it that about sixty percent of CEOS of companies have actually started insales. So if you think about that, sales is a critical skill set becauseyou really can understand, know what people want, what people need andhow to offer it to them, and that's, I think, a criticalskill set. So know the idea here that you know, someone is bornwith a certain skills that I think it's a personality trait. I think someof us are much more into the technical side and thinks things and other peopleare much more in the okay, let's raise the money, let's talk toinvestors, and I think that if somebody says again, what is the skillset which I have, which is, you know, the thing which makesa difference in my role, and I'll come back to a VP who I'veworked with it, you know, many, many years ago, and he basicallysaid, you know, you know, that my ideal tag of who Iam is basically a product or evangelist. So, you know, being ableto evangelize what you believe in and and convinced people that what you haveis the best thing since slice spread is a huge skill and I believe thatpeople who don't have that ability to really be convincing and articulating things, andwhether it's in writing or in speaking, are going to have a really hardtime being the CEO or commercialization leader of a company. and which is finebecause, honestly, you know, I I've met so many amazing technical peopleand I think that even if some person had this ability, okay, I'mthis. Maybe Elon Musk would be an example of someone who can kind ofdo both really well. I actually think that having additional people as founders withyou is really, really helpful. I would not want to start a companyby myself and more than happy to give equity so that somebody else can bewith me in this journey. And you really want people who are different fromyou, people who can actually, you know, you know, argue ordiscuss things with you. I'll give an example, like my my cofounder,Dr Kreen Letni. So, she came from the scientific background. She's comeup with ideas which I initially thought didn't make sense. I thought, there'sno way this is going to work, the customers not going to accept it. But you know, after seeing her,...

...you know be right about five timesover the last three years. I've I've built this trust that she getsthe vision, she gets what customers really want, and it's very comforting tome because I almost say, okay, if she thinks this is going towork, okay, you know there's a high likelihood that she is right.And you know, if I was doing this by myself, I wouldn't havethat. If she was doing it by herself, she wouldn't have someone tokind of challenge her ideas or kind of say, well, maybe it's wrongor right. So I honestly believe that do not start a company by yourself, but do not randomly find someone. Find someone who can really be thisbouncing board or something you can actually actually discuss ideas with brainstone where the politely, even if it's sometimes he did. Your company will be much better offfor that. So, again, coming back to that initial point that youmake. I think you know I definitely came from more of a sales evangelizingbackground, which is more on the commercialization aspects. And I think where itbecomes important is that, you know, you know, things start with aproduct or idea or service, right. But you know, I'll give anexample which, you know, Steve Jobs gave, which I think is really, really true. Let's all think of a a printer. Let's think ofa laser printer, especially the apple laser printers, which are kind of thesethese these very neat clean square boxes, these cubes which output a paper.So the engineers who develop that printer, they love they think about the gearsinside that printer and how it all works and, you know, the lasersmoving in there and and and it's true, it's remarkable and unbelievable. They mighteven want the side panel to be transparent to people can look inside.But what's Steve Jobs said is that ultimately, the customer the one who has thatneed. All they care about is that piece of paper that comes outof that slot, nothing else. And this is this is, I think, a good example for me because, you know, you really have tobe thinking in terms of that piece of paper coming out of that printer,not in terms of the gears or or how the whole thing does it.Get it all right, make sure it's all working beautifully and perfectly and reliable, but the key is, does somebody want that piece of paper? Whatis the quality of that piece of paper? So very critical to not, youknow, be so super focused on the product and developing more and morefeatures and less you are hundred percent sure that what you're doing will lead tomonetization and lead to monetization always quicker than you think you need to because it'svery, very hard from the second you start to monetize, it could takeyears. So don't wait. I see a huge number of founders waiting toolong, focusing too much on the product without thinking how that product solves acertain need for someone else. Yes, yes, yes, yes, soI was talking to a physician who's immersed in the problem all day every day. Has Four years, decided that they were going to develop a product ortechnology to solve that problem and they've been iterating on that product. Now it'sactually been you can download the APP in the APP store, but they haveno commercialization strategy whatsoever, and so for three years. They just keep addingmore features and functionality with that one paying customer or even a strategy to getone paying customer, and I it breaks my heart because I know that thisperson is so passionate about it, but in the world probably could use it, but the world will probably never know that this even exists. Yeah,that is sudden. I think someone like that could truly benefit from someone whohas experience commercializing thumping and getting it out there, because you could have somethingamazing, but if nobody knows about it, it's unfortunate, both in terms ofthe utility it could provide to other people, which is being lost,but also in terms of you personally in your company. So I think thathappens much more than people realize that. There's some scary numbers out there thatninety eight percent of startups that have been funded fail. So you know,the odds are against us. Essentially, and and I do like the pointyou mentioned about heat, we can continue adding features, because that's what alot of people do. They kind of have developed some kind of a product, or could be a Widgett whatever it is, or or service and theythink, okay, I'm not selling because it's missing. This feature, butalmost always is never that. It's not that one feature which I you andyou spend a lot of time, maybe your last dollars, I'm developing thatfeature, then you release it and nothing much changes. It's really not aboutthat. You just have to figure out, am I solving a core need?So maybe I have to pivot to a different customer, maybe have torepackage my technology in a different form so that actually appeal to that need outthere. And I will stress one thing that you know. I'm also involvedin start x, which is a Stanford's accelerator. I judge the applicants forthose want to be accepted into the program and you see a lot of companiesthat have amazing ideas but totally don't understand the the commercialization aspects, and it'sreally scary because you know those are the people you want to bring into theprogram if they have something amazing, but they have to be willing to learn. And one thing I will add here, which I also think is critically important, which is something which you know I'm learning all the time thought this, is that before you go too far...

...in your company, interview customers andI hear the best companies what they do is, even if they're four orfive, six, seven years along, they're spun, still spending time everyweek talking to one, two, five, hundred and ten customers and or potentialcustomers, just you asking them questions, because a lot of times, andthis is something I'll give you some insight from my current company, butwe found is that, you know, we have a service for offering andwe're kind of pushing it and closing and customers like it. But as soonas you ask the customer, okay, we're offering this, but what wouldyou like to see? You know, what do you think here would be, you know a little bit, you know, more customized towards your specificneeds. As soon as they feel that they can get something more specifically thatthey want, the ability to sell it to them switches a hundred eighty degrees. Suddenly they're saying, I want this, when could when can I get this, instead of you pushing it, and what you have you really donehere? You haven't transformed your product completely, you've just adjusted it to be alignedwith what they are asking for. So asking your customers is great forlearning. It helps in selling and I know there's a whole program which SteveBlank it's Stanford put together and it's used by the National Science Foundation as well. You know, in every in customers is become like literally, you know, scientific evidence for success for all startups in Benout to do it sooner themlater, and it's amazing how much you're learned. Don't be afraid, don'tbe shy. Just talk to people. What are they going to say?You know they'll say not interested in talking. You go to the next one.Amazing insights can be had. Hey, it's Dr Roxy here with a quickbreak from the conversation. Are you trying to figure out what moves youneed to make to survive and thrive in the new covid economy? I wantevery health innovator to find their most viable and profitable pivot strategy, which iswhy I created the covid proof your business pivot kit. The pivot kit isa step by step framework that helps you find your best pivot strategy. Itwalks you through six categories you need to examine for a three hundred and sixtydegree view of your business. I call them the six critical pivot lenses.As you make your way through this comprehensive kit, you'll be armed with thetools, tips and strategies. You need to make sure you can pivot withspeed without missing out on critical details and opportunities. Learn more at legacy typeand DNACOM backslash kit. So so, Daniel, I think that that islike probably the most critical advice or wisdom that we could ever share with anyentrepreneur innovator out there that you know, the earlier the better. So manytimes I see I've got an idea, I know the problem in the solution, I build the widget, the solution and now I'm going out and I'mgoing to do these customer interviews. So it's kind of a static, onemoment in time experience. Most of the time I'm just confirmation bias. I'mjust looking for them to confirm what I already believe to be true. I'mreally not suggest look soliciting new insights, because that would derail my whole strategyand plan and and and and I'm going to market and it's so it's likeI'm going to do just one time, check the box kind of thing.Yep, I did these interviews and I love what you said because it's soimportant and it's something that is you're seeing to be a lot more proudable prevalentand both startups and mature companies and other industries. But we're still just kindof scratching the surface on implementing this in healthcare from the very beginning, likewhen I think about I'm going to get investors, I'm going to get advisors, I'm going to get target customers, like day one, day two,really really early on. Yeah, I agree and I think what I've seenis so a lot of the people who come to Stanford STARTEX program are actualfaculty members at stand for, so professors who've come up with ideas from themedical school. Yeah, and it's they have remarkable things and they're sitting inthe room and they kind of feel they want to be an entrepreneur. Butyou do feel that they have to bring someone on on the business side andsometimes it's hard because someone who's professor at Stanford has gone through a lot ofcurdles in life and has done a lot of amazing things. So for themto now partner equally with someone who's, you know, maybe a lot youngerbut has start up experience, I think that's always sometimes of a mental block. But what they have to do that. It's you can have the best ideain the world, but if you really want to make something big,you've got to do that. And I think what I see a lot ofprofessors do because of that is they don't start companies themselves. What they'll dothose stay in the lab day as a professor or in the medical school andthey will basically sell their idea to another bigger company for peanuts. Yeah,to them it's just an easier way out and they don't want to start acompany when they could actually build the companies. And what I see, which isquite amazing, because I do see a lot of these medical companies.You see companies that come out of, say, Stanford and within three yearsget sold for a billion dollars to companies like like Bristol Myers. It's shocking. And then those same guys go and start another company which is worth acouple of billion, you know as well,...

...just after for so so so.The medical schools and these these ideas are sometimes unbelievable. I think theyget sold off prematurely and and I and people in professor to stay as advisorsto a bigger company. That takes it all. If those individuals would alignthemselves more with the business people, people like I think myself, not givingmyself over your credit. But you know, there's definitely another side to this.I'm not a scientist. I don't understand those areas which, you know, people come with these amazing ideas, but I certainly understand how to forma company responsibly, reliably and to initiate an execute on uncommercialization and and there'snothing wrong with that and I think that's a mindset. The other thing Iwould give as a point to people who are in the medical field is thatI think they have a very kind of stable, secure position, usually,which is taken the many years to get to. I think they're much morescared to leave it and and go and start a company because they feel they'relike ending that road versus somebody like myself, as always been start up, doingstartups. I don't mind, I'm happy to go and do the nextone, and so I think there is some kind of reluctance, and it'sespecially true of those who are already in faculty positions. Yeah, and Isee that in the STARTEX interviews. They're kind of they're just like literally,the question we ask always is, you know, are you full time?You know okay, I will be full time later on. It went.What amount of funding does need to be race up? And that's really akind of the last thing investor wants to see, you know, they wantto see everyone a full time now, not later when there's money. Takethe risk now, right. So I think that's an interesting point. Butyeah, I just think there's not enough push in that are and there's amazingideas to be had. Sure, sure, yeah, and so probably similar toSteve Blanks idea, I have a five co framework that I created inone of the things that I think it makes it unique is that, youknow, so we're not only including the customers in the ideation phase, buteven in launch, right, so it's not even just like hey, helpme build this technology solution that you're going to love and want to buy,but also including the customers in the launch process and thinking about this as justpart of the culture. It's just what we do. And in you touchedon that. To you know this, it's not like we're going to doa focus group and then everybody's going to go back and maybe in another sixmonths or another year going to do another focus group. Like we build itinto our operating processes of we got this continuous flow of information of how arewe building meeting needs, you launch, launching, you know, to collectivelywhere we really start to see our target customers as part of the team.Yeah, absolutely, and I think, I think when we try to tryto think if I'm trying to close a new customer in our for our serviceright now now, in that to sales discussion, what is the number thing, number one thing I can show them that will give them confidence that whatI'm selling them has value and will give them benefit? And it always comesdown to referenced customers. Everyone, I wants to see your product live onsome other customers website being used by some other customer. And and again youcan do that through creating case studies, having press releases where your customers arequoted. But it always comes down to that and that's why it's so hardto get that first or second or third customer, once you get them theiramazing references. So I think your point is very valid. It's not onlyin the ideation stage that you want to ask people and you want to doit. There's really no ideation stage. is almost like there's endless ideation.I gation. Your ideation stages for every feature, every direction you want totake, every new market. So it's continuous and I think that customer interviewingor customer interactions and asking, not telling. Asking is is the right way.But I think sometimes founders ego gets in the way where they think,okay, I came from this domain, I know exactly how it works andthat's finally might know exactly how it works in one sense of it, butthere's a whole world out there that maybe you have to educate and they mightnot under stand the way you're presenting it. So you need to switch the wayyou're conveying the messaging. So I think this is something great out ofthis conversation which is really being focused on, is talk to those who you wantto be your customers all the time throughout the entire venture. Even ifit seems artificial, even if it sounds, you know, waste of time,it's really valuable. You wouldn't be shocked how much you can learn fromfrom talking to them. Yeah, that's great. So do you have anyinsights in look the size of that customer right, so I also see alot of folks get a little, I call it, like Woo Woo.If you know a big health system right with a really deep brand, youknow ends up being their pilot customer or their first customer, and you knowthere's some pros and cons to that. You know this might customer might endup being extremely demanding and take over your...

...whole product development with strategy and andnow of a sudden, at the end of the day, you might bein so inclined to invest in that path because you want the additional revenue tocome in right and you want to make sure that this customer is satisfied.But then you might end up with something that's really not commercially viable. It'sgreat for this customer but not necessarily commercially viable across the entire market segment.In your experience, is there any pros and cons between like a large player, small player or a middle player and how that might help with product developmentas well as with the launch process? Yeah, so it's actually very commonto get into a relationship with a kind of a big, medium sized customer, because what you're doing in that sense you're actually having them fund your development. Now, the reason they're doing and it's not, you know, fromfulfill and tropic reason they're doing it because they probably see potential in your companyas being acquired by them. So it's more of a strategic partnership. Butyou have to be very, very careful not to create a product solely forthem that if that relationship goes sour or, you know, if, for example, the money money is not significant, you're not stuck with something which youcannot later on sell to someone else again. It's always about how yousee yourself. Don't know, and this is again an important tip for raisingfunding, you have to see yourself as equal to the partner, whether it'sa investor, whether it's another company. The problem with a lot of thesedeals that's done like, okay, I'm small, I have this Ledya,you're helping me, instead of being more of a commercial agreement between two equals. I'm bringing this amazing technology, I'm willing to do development for you,but you have to pay for it and it's, you know, a partof what we're doing. It's not the entirety of the company, but youknow, the last point on this is that ultimately the reason they're doing thisis most often because they want to either acquire the technology for themselves and theydon't really care if they say no at the end and you're stuck with nothing. So got to be very careful. Yeah. So, so, Daniel, as we think about you know all of your different experience dances, including, you know, your current company, what do you think the number onechallenge that entrepreneurs or innovators or facing right now in healthcare and and what's thewisdom or the the lesson learned that you would share in response to that?Yeah, so I think one of the problems is that the products and healthcaretend to be very, very narrow in the need they're solving and I thinkthat's sometimes dangerous because it's almost like either it works or doesn't work. Work, and I think oftentimes it makes you think, okay, I have thisamazing again. It might be an amazing idea and it might actually solve inneed, which is critical. But what investors want to see? They wantto see a big market, which means that you can just take take thewidget, take the service and think about it. Okay, how much moneyam I going to be able to generate in sales from this item? Andsometimes it's difficult for founders because they they have a lot of passion towards thisone problem that they might have seen, you know, in a clinic environmentor maybe in a hospital, and it's truly an important need that needs tobe solved. But it might be something that you do need to go andfind and medtronic or Johnson and Johnson and actually have them product eyes it,make a company out of it and you maybe are on the patent and thenyou could get licensing fees. You have to be careful because a product thatyou believe okay, great, I can make twentyzero these or Fiftyzero these andyou know I'll make a few million revenue. That is not something people want toinvest in. Investors who are serious investors want to see a business thatcan be worth a billion dollars with a B, and that means in thekind of in the best case scenario, you'll be able to reach fifty milliondollars annual recurring sales, and that's a lot of sales. If Your Businesscan generate five ten million a year, I think that's a great success,but it's not something you can go to traditional investors with and you have tofind a different route to build your business. But I do find that in themedical field a lot of these solutions are very, very specific in termsof what they solved, and if it's a therapeutic it's even harder because veryoften it's just an idea and it's unproven and then a chance of that succeedingis very, very low. So I think then the lesson here is,even if there's a really, really deep need for something in a specific context, if that cannot be projected out to much, much larger revenue numbers,numbers which maybe seem crazy, because to us, if we sell something andgenerate five or ten million a year it sounds like a lot and it solvesa critical need which saves lies. It's not enough, investors will not lookat it seriously, unfortunately. Yeah, yeah, I think that's so important. I think that it's like a balance between, you know, my initialcommercialization or go to market strategy might be on a single narrow market or likea niche marketing strategy, but I but I have in plans in place forit to be this bowling pin effect of like all right, tackled it,you know, knock that one down, knock that one down. So you'vegot the the focus up front, right,...

...so you're not spreading resources too thin, but at the same time you have plans to be able to sellthat to multiple sub sub markets, right. So that's good point. So ultimatelythat's it's a little different from what I said earlier in terms of likewhat I s Earli is one thing where you have a very specific product whichisn't applicable to many markets. In your context, is right, and ina different sense, that you basically have multiple markets that you can target withyour product. So if your product is a product that applies to not onlya single narrow vertical market but can apply to many markets, it just needsto be kind of adapted, that's great. That's fine, because then what you'retalking about is more okay, I'm going to choose a first market orfirst customer type to Jane. That typically is called your beachhead customer. Yeah, and that's very good because it's basically saying, okay, I know Ican approach a lot of other markets, but I'm going to be very focusedbecause I don't have enough money, I don't have enough when to develop aproduct in five different markets simultaneously. I'm going to go after that beach atcustomer, kind of the lowest hanging fruit the market which will like a postand and that market could generate only five hundred and ten fifteen million a year. And that's totally fine, because your products are lootable to other things.What I was more worried about is that the product is very, very narrowas a device which can't necessarily be adapted to other markets, which to meis kind of said. It's almost like orphan drugs, where you have,you know, the lot of diseases out there, which is don't affect enoughpeople and therefore the drug companies don't address but the act critically important. SoI think actually in vesting in things which are, you know, maybe smalleris a good thing and there are probably investors out there who are okay withthat. But when you talk to the big ones, if you want togo to the big venture capital firms, you know if you can't show themthat you can be worth the billion, which means fifty million plus in sales, you're not going to be taken. But I think your point is istruly remarkably valid here, that that beachhead market is critical. So even ifyou develop something which is really cool, if it can apply to multiple verticals, that's perfect. Choose one where you have, you know, the mostdemand, the fastest demand, the most alignment without having to adapt your producttoo much, and then go after that, prove that there's demand, make somemoney and then use that to raise additional funds and go after additional markets. But yeah, very, very good point. Yeah, I'm so gladyou clarified that, because I do see a common pitfall is that I cansell many products to many markets and and I don't pick something and so I'mtrying to it seems as though I'm trying to be all things to all peopleand I don't have a whole lot of money. The money aspects the hardparts, and I think it's sometimes tempting. But again, I'm coming from myexperience. In the past I would have just said, okay, let'sgo after this and this and this, and it's just you kind of haveto just choose one right, right, one thing you're doing and and it'ssometimes hard because you're kind of but the focus is crazy because you'll learn somuch and by just doing that one one mark a very focus. That's analso investors love that. Investors hate that you come and show, okay,I can this works for this and for this and for this and for this. It's great, but you're basically five years too early that commercializations tread tokeep prove that you can just give me one customer, give me one typeof product worth one market. But yeah, very, very good. I totallyagree. So when you think about, you know, commercializing your your currentcompany, in your current solution, what are you doing differently in thiscompany, when you think about this being the seventh company that you are buildingfrom scratch, you know, help us debunk maybe some myths that entrepreneurs believeor just some additional lessons learned as you come along. Yeah, so Ithink it's a lot of it comes to the focus on a very specific,narrow area. I think that's one thing in our company. On our companyright now we're selling a content syndication service to help, you know, suppliersof life science tools, you know, build trust and confidence in their productsnow. So I think I think we've taken one very specific area to monetize. We also have a platform where scientists and come in and use as asearch engine, but we've chosen not to monetize that. So, you know, it's not that it's not monetizable. We've chosen not to monitize. That'sa big difference there and I think that requires a lot of discipline. Ithink we've kind of developed that discipline and you'd be careful because you can getopinions along the way pulling you in one direction of the other, and Ithink that's also something which I've learned. To Listen, listen to people whotalk to you, to accept the data points, but then analyze it andalways go with what your own good is telling you to do, even ifit's against someone who might have the biggest title in the world, or youknow titles. You know they don't know your company. Nobody knows your companyas well as you know your company. To listen to others and, youknow, use those data points to make maybe better decisions, but still gowith what what you think is critical.

So that's one thing. It's thewhole focus aspect in terms of monetization. So choose one, and it's alittle different from what we talked about earlier because, well, earlier we talkedabout different markets to sell to. We're still going to the same market,yeah, but going with a much no just monetizing one aspect of our technologyand being very focused, and that's ready. The second thing I will bring forthis that I think companies too often just start, okay, I'm justgoing to build this platform or build this APP or build this this this productis this tool, and they start selling it. They don't look at itas okay, you know what is my overall strategy to become a leader inthis market. And there's this whole term of scalable monopoly. I think PeterTil brought it about. Is Really critical because you want to take a marketwhere you can actually become monopolistic in that market and actually own it. Soand that might take more than just developing a product and going to market rightaway. You might have to have different strategic aspects to it. So youmight want in our case, for example, we're building the researcher community, we'rebuilding the supplier Commun unity, we're kind of bringing those maybe together.So there's all these concepts of okay, I'm staging and I'm starting with onething, then I'm going to do the next thing that I'm going to dothe third things. So kind of like act one, act two, actthree. Think of your company in terms of that. It doesn't have tobe just one single tooler product, because you want to win in the overallstrategy. It's not just by so you're building a company, you're not justdeveloping a product. It's very different. Think of a company is more ofa strategic thing. A product is more of a tactical element in building asuccessful companies. I think those are the kind of the main things which whichI've owned here. But I do want to say, and I'm very humpful, although I've done a lot of companies, it's sometimes scary how little I feelI know because it's just it's just learning all the time. And I'mnot even talking about, okay, how little I know about other fields Ihaven't worked in. I'm just talking about just common business sense and and andyou know, it's remarkable. So I really feel that every entrepreneur, ifthey can do themselves a huge favor, remain humble and just be very opento learning, and it doesn't matter who's teaching it. Just constantly suck ininformation, try to put into the context that you're currently working and then tryto convey that knowledge for the others. But you know, I talked tosome very smart people who are kind of you know getting on in the yearsand they basically said that what their focus is on life after they've been verysuccessful is two things. They're focused on teaching and learning. Yeah, that'sclear. That's their life and if we think about in that sense, ifour lives can be focused around teaching and learning, I think that's really thethe core to all of this in the long run. Absolutely I couldn't agreemore. The you know, like my doctorate is in a specific business problem. That was seven years ago. I learned something new every single day.It's just it's incredible peeling the layers back, and so I think you just spoton. You just we continuously learn and it's not even that market conditionschanged, it's just that there's a whole lot of information out there, evenabout a single business problem. I know it's endless. I think that's alwaysit. That's there's a flip side to this as well, is that somepeople say, okay, just sit down and read books all the time.Right. You know, there's no way that someone who's running a start upand sit down and read books all the time. And even if you justlooking at articles, there's so much data out there. So I really suggestthat when somebody's operating a company. Try to focus on those things which isspecifically going to help you continue developing your product and or monetizing commercial as andwhere you're doing. You know, it's very easy to get sucked into allthese theories and strategies which you know very often do not apply at all towhat you're doing. So again, I think that's the flip side of this. You know, trying not to waste time on just general learning might beinteresting, if it's not a play couple to moving you forward, wait untilyou actit. Yep, that sound is great. Thank you so much forsharing all of your wisdom with our listeners and viewers today. So if folkswant to get a hold of you after the show, how did they dothat? So the best way to do this email me directly, and mynails a Daniel at bioscom, so it's Da Nieo Bio zcom. I'm totallyhappy to help people out and if there's some great ideas there that I canintroduce to the startux Stanford Accelerator, I'm happy to do that. Like Isaid, I'm really excited to be helping others along their journey perseverance. Iwill mention towards the end that that is what I have found to be key, because one thing it's hard to do. It's hard to time the market.You really do not know if your specific product will be most accepted todayor in three or four or five years. So continue doing were you doing andyour time will come. Thank you so much. I'm very welcome.I really appreciate it. Thanks rosy. Thank you so much for listening.I know you're busy working to bring your life changing innovation to market and Ivalue your time and your attention. To save time and get the latest episodeson your mobile device, automatically subscribe to...

...the show on your favorite podcast APPlike apple podcast, spotify and stitcher. Thank you for listening and I appreciateeveryone who's been sharing the show with friends and colleagues. See You on thenext episode of Coiq.

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